CHAPTER XII.

OF THE LAW OF SHIPPING.

SECTION I.

OF THE BUILDING AND OWNERSHIP OF A SHIP.

A.-Of a Building Contract.

THIS contract may be whatever the parties to it choose to make it. Thus, one who desires to own a ship, may propose to supply the builder with all requisite materials, the builder to do for him all the requisite labor. The ship would then never be the builder's, but would from the beginning belong to him for whom it is built. Ships are not however often built in this way. The builder usually constructs the vessel for one of four purposes. Either to supply an order, or to execute a contract, which may be regarded as substantially the same thing, or to sell it to some purchaser who may desire to buy it, or to own it himself.

One important question has arisen about which the cases are in much conflict. If a ship be built on a building contract, and the price is to be paid by instalments, does each instalment when paid purchase the fabric as it then exists, passing the property absolutely to the purchaser, subject only to the lien which the builder has for the purposes of finishing the ship.

The cases on this subject are in much conflict. In the earlier English cases much reference is made to provisions in the English statutes and usages as to builders' certificates and the grand bill of sale, which do not exist in our own. We consider, however, that the law is now well settled, especially in this country and by recent cases. If it be the intention of the

parties that the builder should sell and the purchaser buy the ship before it is completed, and at different stages of its progress, and a bargain is made sufficiently expressive of this intention, there is no reason whatever why the law should not enforce such a bargain. But no such bargain would be implied from the mere fact that payment is to be made by instalments, whether they are graduated merely on time, or on the state or condition or progress of the ship. Nor would this implication arise from, or be greatly aided by, the employment by the purchaser of a superintendent. These facts might assist in identifying the structure, or sustaining an action for a breach of the contract; and they might bear on the amount of damages. But they would not be sufficient to prove an actual sale and transfer of the property by the payment of an instalment, so that after such payment, if the property were lost or destroyed, it would be the loss of the purchaser. (a)

At the same time, it appears to be decided, that payment of instalments imposes upon the builder an obligation to finish and deliver under his contract the identical vessel. (b)

The original bill of sale by which the builder transfers the ship to the first purchaser, whether built by contract or otherwise, is called in England the Grand Bill of sale, (c) and is distinguished by this name from subsequent bills of sale- made by the purchaser or his transferees; but we have no such distinction in this country. (d)

(a) Wood v. Bell, 5 Ellis & B. 772, 34 Eng. L. & Eq. 178, affirmed in the Exchequer Chamber, 6 Ellis & B. 355, 36 Eng. L. & Eq. 148; Baker v. Gray, 17 C. B. 462, 34 Eng. L. & Eq. 387; Woods v. Russell, 5 B. & Ald. 942; Battersby v. Gale, cited 4 A. & E. 458; Atkinson v. Bell, 8 B. & C. 277, 282; Clarke v. Spence, 4 A. & E. 448; Laidler v. Burlinson, 2 M. & W. 602; Andrews v. Durant, 1 Kern. 35; Merritt r. Johnson, 7 Johns. 473; Johnson v. Hunt, 11 Wend. 135; Moody v. Brown, 34 Maine, 107. A conveyance of the keel after it is laid vests the property of it in the vendee, and draws after it all subsequent additions. Glover v. Austin, 6 Pick. 209. See also, Sumner v. Hamlet, 12 Pick. 76, 82. An agreement to pledge a vessel building to cover certain advances, and that the pledgee may purchase her at a

certain rate, is neither a sale nor a mortgage or pledge, and transfers no property in the vessel, although the advances are made. Bonsey v. Amee, 8 Pick. 236. See Reid v. Fairbanks, 13 C. B. 692, 24 Eng. L. & Eq. 220. Where the property passes before the completion of the ship, the builder has a common-law lien, a right of possession to finish her and earn the full price. Woods v. Russell, supra.

(b) Andrews v. Durant, 1 Kern. 35.

(c) Abbott on Shipping, 3. In England the grand bill of sale is necessary to the transfer of a ship at sea. Atkinson v. Ma ling, 2 T. R. 462; Gordon v. East India Co. 7 T. R. 228, 234.

(d) Portland Bank v. Stacey, 4 Mass. 661; Wheeler v. Sumner, 4 Mason, 183; Morgan v. Biddle, 1 Yeates, 3.

The builder should deliver his certificate to the first owner, and the owner give it to the collector, as required by the Statute of Registration. (e)

Formerly, builders of ships, as well as those who repaired, equipped, or supplied them, were called material men; (ƒ) and this somewhat peculiar phrase has been in use as a term of the law merchant for some centuries. Now, however, the phrase is confined, perhaps in law, and certainly in practice, to those who repair the ship, or furnish her with supplies, or do any work about her necessary for her seaworthiness and complete equipment. (g) By the maritime law of Europe, and by the Roman civil law, material men have a lien on any ship which they repair or supply. (h) The reason of this is obvious. Ships are often at a distance from their owners when they need and have these repairs or supplies, and therefore persons who furnish them should have a demand against the ship itself, without being obliged to recur to the owners. There is also another reason; and it is that ships may be owned by persons who are unknown to the material men. For these two reasons, the civil law and the general maritime law gives to material men this lien upon all ships, without any distinction between foreign and domestic vessels. In this country, however, it would seem that the first reason only has any influence; for with us the maritime lien is limited to foreign vessels. (i) But in this respect, as in the general application of the law merchant, our states are considered as foreign to each other. (j)

(e) Act of 1792, c. 1, § 8, 1 U. S. Stats. at Large, 291.

(f) Jacobsen's Sea Laws, 357, note; Sir Leoline Jenkins as cited by Lord Stowell in The Neptune, 3 Hagg. Adm. 142.

(g) Thus it has been held, that no lien exists by the maritime law for the building of a vessel. People's Ferry Co. v. Beers, 20 How. 393; Roach v. Chapman, 22 How. 129. See The Richard Busteed, Sprague, 441, for an able decision in favor of the jurisdiction in such a case.

(h) Dig. 14, 1, 1, Ord. de la Mar. liv. 1,

tit. 14, art. 16; The General Smith, 4 Wheat. 438; The Nestor, 1 Sumner, 73; The Young Mechanic, 2 Curtis, C. C. 404.

(i) In the case of a domestic vessel, by the maritime law as now settled in this country, the lien depends on possession. The General Smith, 4 Wheat. 438; The St. Jago de Cuba, 9 id. 409. But in the case of foreign ships, the lien does not depend on possession. The Jerusalem, 2 Gallis. 345; Zane v. The Brig President, 4 Wash. C. C. 453.

(i) Pratt v. Reed, 19 How. 359; The

Persons employed about a vessel may have in fact either of three liens, or in some instances all of them, which, though quite distinct in their origin, and somewhat so in their operation, are sometimes confounded together. One of these is the commonlaw lien of a bailee. The second is the maritime lien of material men. And the third is the statutory lien of workmen and mechanics.

By the first, a builder of a ship belonging to another person, or any person making repairs upon a ship, if for this purpose he has possession of the ship, has a common-law lien upon her for his charges, and may retain his possession to enforce this lien. And this lien may be enforced in admiralty, so far as repairs are concerned. (k) But if possession of the ship is parted with, this lien is lost. (1)

The maritime lien of material men is widely extended in admiralty, and our admiralty courts claim and exercise a full jurisdiction over all claims and questions arising under this lien. They require, however, evidence that the supplies and repairs were obtained, and that they could not have been obtained upon the personal responsibilities of the owners, without security on the vessel; (m) although it is not necessary that the vessel should in terms be made liable for the payment. (n) Hence, although the vessel is in a foreign port, if the owners are present or have an agent present, ready to advance or pay for whatever may be necessary, there is no lien. (o) And although the general rule confines this lien to a foreign vessel, yet if a vessel is in her home port, and is there held out by her owners as a foreign ves

Brig Nestor, 1 Sumner, 73. This doc trine grew out of a dictum in The General Smith, 4 Wheat. 438, but it may now be considered as settled. In Beach v. Sch. Native, U. S. D. C., N. Y., it is said, on the authority of a remark in Pratt v. Reed, 19 How. 359, that as the master would have no power to give a bottomry bond where the vessel belonged to an adjoining State, and as the necessity which authorizes the giving a bond differs from the necessity anthorizing the imposition of a lien only in respect to the maritime interest, no lien could be imposed in such a case.

(k) The General Smith, 4 Wheat. 438, per Story, J.; The Sch. Marion, 1 Story, 68 Peyroux v. Howard, 7 Pet. 324. If

material men who repair a vessel, retain possession of her and claim a common-law lien for the repairs made, they cannot add to this charge the expense of keeping the vessel, since they keep her for their own benefit. Somes v. British Empire Shipping Co., H. of Lords, 2 Law Times, N. 8. 547.

(1) See cases supra, note (i).

(m) Pratt v. Reed, 19 How. 359; The Sarah Starr, Sprague, 453. See Beach v. Sch. Native, U. S. D. C., N. Y., cited supra, note (j).

(n) The Sea Lark, Sprague, 571.
(o) Boreal v. The Golden Rose, Bec,

131.

sel, material men who have repaired or supplied her in that belief, will have a lien which admiralty will enforce. (p) The residence of the owners of the vessel and not that of the furnisher, is to be looked to in determining whether the vessel is a domestic one or not. Therefore if the vessel is in her home port, no lien exists for the supplies there furnished, although the furnisher resides and does business in another State. (q)

The third or statutory lien is of course defined and determined by the statutes of each State, and to these statutes we must refer. Some of the more important results of adjudications determined under them are as follows.

In Maine, the lien attaches to the vessel while building, and continues for four days after she is launched; and if the materials are sold on a credit which reaches beyond the four days, there is no lien. (r) The materials must actually go into the ship and make a part of it when finished. (s)

In Massachusetts, under the statute of 1855, it has been held, that the materials must be specifically furnished to be used in a particular vessel, in order to give a lien on that vessel, and it is not enough that they were so used, if not furnished for that vessel. (t) And a petition cannot be filed in the State court until the sum has remained unpaid sixty days after it was due. (u) But this is not so in admiralty. (v) Under the Massachusetts statute of 1848, the term "construction" has been held to extend to alterations of a vessel. (w)

In New York, the lien of the builder attaches only when the fabric assumes the form of a ship, (x) and the creditor loses his lien by permitting the vessel to sail without enforcing it, but sailing on a trial trip only is not a departure with this effect. (y) Nor is it one if she leaves the State fraudulently; at a time when

(p) The St. Jago de Cuba, 9 Wheat. 409. See also, Musson v. Fales, 16 Mass. 332.

(9) The Eliza Jane, Sprague, 152. (r) Scudder v. Balkam, 40 Maine, 291. See also, The Kearsarge, Ware, 2d ed. 546, 550.

(s) Taggart v. Buckmore, 21 Law Rep. 51. See also, The Young Sam, U. S. Č. C., 20 Law Reporter, 608; Sewall v. The Hull of a New Ship, Ware, 2d ed. 565; The Kiersage, 2 Curtis, C. C. 421. The stat

ute does not embrace tools used by the workmen. The Kearsarge, Ware, 2d ed. 546, nor materials furnished for the moulds of the ship. Ames v. Dyer, 41 Maine, 397.

(t) Rogers v. Currier, 13 Gray, 129. But see The Antarctic, Sprague, 206. (u) Tyler v. Currier, 10 Gray, 54. (v) The Richard Busteed, Sprague, 441. (w) The Ferax, Sprague, 180. (x) Phillips v. Wright, 5 Sandf. 342. (y) Hancox v. Dunning, 6 Hill, 494,